Kenya Leads in Retail Fraud Attempts, Digital Scams Surge Across Industries, Reveals TransUnion Report

Kenya ranks among the top countries globally for suspected digital fraud, particularly in retail, according to a recent report by TransUnion. The analysis, which covered the first half of 2024, shows that 4.6% of all digital transactions originating in Kenya were flagged as potentially fraudulent.

The report places Kenya tenth out of 19 countries and regions assessed by TransUnion’s digital fraud analysis, with retail, gaming, and online communities (such as dating platforms and forums) experiencing the highest fraud rates.

Retail Tops Kenya’s Digital Fraud Landscape

Among the various industries analyzed, retail emerged as the most targeted sector for digital fraud in Kenya, with a suspected fraud rate of 11.7%. Gaming followed closely with 11.4%, and online communities reported a rate of 3.3%. The findings are part of the newly released TransUnion H2 2024 Update to the State of Omnichannel Fraud Report, which evaluates trends from January to June of this year.

“Despite the good-faith efforts of global organizations to identify and prevent fraud, fraudsters continue to adapt and exploit weaknesses in digital platforms,” said Amritha Reddy, Senior Director of Fraud Solutions at TransUnion Africa. Reddy stressed that businesses should adopt comprehensive fraud prevention technologies, such as identity verification and IP intelligence, to combat these evolving threats.

Kenyans Face a Growing Wave of Digital Fraud Attempts

In a survey conducted by TransUnion, 80% of Kenyan consumers reported receiving fraud attempts via online channels, email, phone calls, or text messages in Q2 2024. However, only 8% of those targeted admitted to falling victim, highlighting a notable awareness among consumers but also underscoring the need for continued vigilance.

Kenya’s digital fraud trend aligns with global patterns, where new account fraud is rising as more businesses shift to online platforms. TransUnion found that, for transactions where the consumer was in Kenya, 4.8% of digital account login attempts and account openings were suspected of being fraudulent in the first half of the year.

The Rise of Synthetic Identity Fraud

The report also pointed to a sharp increase in synthetic identity fraud — a scheme where criminals use real personal data combined with fake information to create a new, fraudulent identity. TransUnion’s data revealed that synthetic identity fraud grew by 153% worldwide from late 2023 to mid-2024. Furthermore, electronic fund transfer fraud saw a year-over-year growth of 113%, making it one of the most rapidly increasing fraud types.

Morris Maina, CEO of TransUnion Kenya, warned of the growing sophistication of fraud techniques, particularly in identity-related crimes. “Digital fraud waxes and wanes, but trends in cybercrime are clear. Now and in the future, organizations face more sophisticated cybercriminals weaponizing identity data at scale to perpetuate both first- and third-party fraud schemes,” said Maina. He emphasized the importance of efficient fraud prevention methods that leverage data insights, advanced analytics, and integrated technology, warning that without these, companies may experience increased losses and expenses from false positives.

Global Context: Online Communities as a Major Fraud Target

On a global scale, TransUnion noted that online communities were the most frequently targeted by fraud attempts in seven of the 19 regions analyzed. Profile misrepresentation, where fraudsters post fake details or photos, was identified as the leading form of digital fraud within these online communities. This trend signifies that communities catering to social interactions, like dating platforms and forums, continue to be high-risk zones for fraud activities.

The Call for Stronger Fraud Prevention Strategies

The findings have prompted a call for businesses in Kenya to adopt robust fraud prevention strategies. TransUnion recommends that companies implement a multi-layered approach that includes synthetic identity detection, device reputation checks, and real-time identity verification.

“Fraud prevention is a necessary investment,” noted Maina. “Organizations must harness better data and risk signals to detect fraud proactively, rather than responding after damage has been done.”

As Kenya and other nations grapple with increasing digital fraud, the State of Omnichannel Fraud Report underscores the urgency of adopting technologies that secure consumer trust and ensure safe online experiences. The comprehensive report, which includes country-specific data for Kenya, South Africa, Brazil, the UK, and other regions, provides insights into fraud prevention measures for businesses to counteract these global trends.